Diversity helps shield CN’s dividend

Article Excerpt

Railways are highly cyclical businesses: demand for their services tends to move up and down with the overall economy. The Trump administration’s recent tariffs on steel and aluminum imports from Canada—as well as Ottawa’s plan to impose tariffs on some U.S.-made goods—also adds risk for railway operators. We feel CN’s diversity of customers in both countries will help protect it from the new tariffs, and let it build on its 23-year record of increasing dividends. CANADIAN NATIONAL RAILWAY CO. $108 (Toronto symbol CNR; Conservative Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 742.7 million; Market cap: $80.2 billion; Dividend yield: 1.7%; Dividend Sustainability Rating: Highest; www.cn.ca) operates Canada’s largest railway. Its 32,200-kilometre network stretches across the country, and reaches the U.S. Midwest and Gulf Coast. CN first sold shares to the public in November 1995 at $2.25 a share (adjusted for splits) Microsoft founder Bill Gates is CN’s largest shareholder with a 13.6% stake Plans to spend $3.4 billion on new tracks and other…